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    An unlawful partnership is void from the start. Any profits will be confiscated by the government and any tools or proceeds from illegal acts will also be forfeited. The contributions of the partners will not be confiscated unless they fall into the latter category. A partnership has a separate legal identity from its partners and can own property, sue, and be sued. Partners have an obligation to share losses proportionately based on their share of profits, unless a different agreement is made. One partner cannot be excluded from sharing losses as that would be an invalid contract term.

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    Answers 7

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    Xiv Nix
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    An unlawful partnership is void from the start. Any profits will be confiscated by the government and any tools or proceeds from illegal acts will also be forfeited. The contributions of the partners will not be confiscated unless they fall into the latter category. A partnership has a separate legal identity from its partners and can own property, sue, and be sued. Partners have an obligation to share losses proportionately based on their share of profits, unless a different agreement is made. One partner cannot be excluded from sharing losses as that would be an invalid contract term.

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    An unlawful partnership is void from the start. Any profits will be confiscated by the government and any tools or proceeds from illegal acts will also be forfeited. The contributions of the partners will not be confiscated unless they fall into the latter category. A partnership has a separate legal identity from its partners and can own property, sue, and be sued. Partners have an obligation to share losses proportionately based on their share of profits, unless a different agreement is made. One partner cannot be excluded from sharing losses as that would be an invalid contract term.

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    © All Rights Reserved
    155 views3 pages

    Answers 7

    Uploaded by

    Xiv Nix
    An unlawful partnership is void from the start. Any profits will be confiscated by the government and any tools or proceeds from illegal acts will also be forfeited. The contributions of the partners will not be confiscated unless they fall into the latter category. A partnership has a separate legal identity from its partners and can own property, sue, and be sued. Partners have an obligation to share losses proportionately based on their share of profits, unless a different agreement is made. One partner cannot be excluded from sharing losses as that would be an invalid contract term.

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    of 3

    1. Explain and illustrate: “A partnership is a juridical person.

    A partnership is recognized as a legal person and is distinct from its


    members. Bearing its own name, it can acquire any property, bring actions
    in court and even incur its own liabilities.

    2. Give instances wherein a person not a partner has a right to share in


    the profits of a partnership.
    3. Give the effects where a partnership is formed for an unlawful
    purpose.

    EFFECTS OF UNLAWFUL PARTNERSHIP (ART. 1770 PAR 2)


    1.    The contract is void ab initio and the partnership never existed in the
    eyes of the law
    2.    The profits shall be confiscated in favor of the government
    3.    The instruments or tools and proceeds of the crime shall also be
    forfeited in favor of the government
    4.    The contributions of the partners shall not be confiscated unless
    they fall under no. 3
    1. A bought a secondhand car. He told B that he would give B half the
    profit of its sale if B would repair the car. B did not repair the car. A
    hired C to do the work and later sold the car at a profit. Does a
    partnership exist between A and B? Is B entitled to a profit? Explain.
    A partnership does not exist between A and B because they have
    failed to comply to the requirements of Art. 1767 to form a
    partnership. Since they have not entered a contract and B was not
    able to accomplish A’s condition, B is not entitled to any profit.
    2. A and B entered into an agreement to form a partnership. Because of
    A’s refusal to comply with the agreement, B brought an action to
    compel the execution of a partnership contract. May A be compelled
    against his will to carry out the agreement or execute the partnership
    papers?

    A may not be compelled against his will to carry out the agreement
    nor execute the partnership papers. A has an obligation to do, not
    to give (Art. 1167), and he has the freedom to do or not to do it.

    3. Can a partnership be a partner of another partnership? Explain.


    A partnership can be a partner of another partnership. It is
    stated in Art. 1768 that the partnership has a juridical
    personality separate and distinct from that of each of the
    partners. Partnerships consist of two or more persons that include
    not only natural persons but also juridical persons.
    4. Do partners in a partnership have the duty to contribute due to losses?
    Do they have to agree to a system of sharing losses? Explain.

    Yes, the partnership has the duty to contribute due to losses. The
    intention of dividing the profits among themselves (Art. 1767)
    carries the obligation to share in loss. The system of sharing
    losses shall be based on Art. 1797 that says the losses and profits
    shall be distributed in conformity with the agreement. If only the
    share of each partner in the profits has been agreed upon, the
    share of each in the losses shall be in the same proportion.

    5. A and B as couple, partnered with C. In the partnership agreement,


    since B love A so much and would not dare see her in distress in as
    much as the world turns upside down when she is in distress, it was
    proposed by B that A shall be excluded in any share for losses, if any.
    Is the provision valid? Explain.

    A cannot be excluded in any share for losses. Art. 1799 states


    that a stipulation which excludes one or more partners from any
    share in the profits or losses is void.

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